- Optimism about the economy increased strongly
- Vast majority of firms looking for further growth
- Hiring talent cited as biggest challenge
Many respondents to the latest Business Confidence Survey published by the Foreign Chambers in Japan—an informal organisation of foreign chambers of commerce and business groups that includes the British Chamber of Commerce in Japan—have expressed improved optimism compared to the previous edition, which was published in October 2016. Conducted between 12 and 21 April, the survey saw improvements in its indexes tracking growth, performance and sales.
Using an index with a scale of +2 (strong improvement) to -2 (strong decline), expectations for the Japanese economy over the next six months reached +0.40, up from +0.10 in the previous survey. Optimism about the economy over the next 12 months was even stronger, registering +0.55 compared to +0.27 in October.
Optimism was at its strongest for sales, with forecasts for this hitting +0.87, an increase of 0.14 from October. Profitability forecasts also showed a high degree of positive sentiment, increasing from +0.54 to +0.75.
These figures were underpinned by strong performance in the preceding six months, with sales performance and profitability growth reaching +0.70 and +0.66, respectively. This has translated into a bullish attitude among the vast majority of survey respondents—77% are looking for further growth, compared to 72% in October.
But in terms of hiring, however, the majority of firms planned to maintain their current level (46%) or downsize their workforce (6%). Nonetheless, the remaining respondents, accounting for 46%, said they were planning to expand their staff numbers over the next 12 months.
Shedding light on those answers, respondents were asked what the biggest challenge is at the moment in the Japanese market. Issues related to human resources—particularly in relation to hiring and retaining staff—were the most widely cited problem.
European respondents were also asked a further question—how will Brexit affect the UK and the European Union (EU)? Sixty-five per cent of those queried thought it would be bad for both parties, while 6% thought it would be good for both. Those predicting a positive outcome for the EU but a negative one for the UK totalled 13%, compared to 9% expecting the reverse.
The next survey will be conducted in mid-October 2017 and published later that month.